Implementing Cloud-based Accounting: Pick Your Path

From guest blogger Randy Johnston. Ask five CPAs how they plan to implement cloud-based accounting in their clients' companies. At least one will begin with, I know we need to do that, but…

You may be incorporating cloud-based technologies without considering yourself part of this next wave of change. You may be a Bill.com user or Concur enthusiast. Maybe you manage your sales taxes with the help of Avalara, or you've made your document workflow paperless by incorporating SmartVault.

This use of the internet for virtual computing will be the rule someday, according to many technology thought leaders. Businesses will meet their needs for financial and document management in an a la carte fashion. They may like A/P and A/R from one vendor, inventory administration from another and payroll from yet another. Companies will be able to choose from among best-of-breed options, and these individual applications will integrate with each other.

Early leaders in this protracted evolution are emerging, making it possible for you to roll out single-function cloud-based practice areas for your clients. Other subscription-based services offer more all-encompassing solutions. Each plays a role in changing the way you and your clientele manage your finances, offering:

  • Choice
  • Enhanced flexibility, mobility and interactivity
  • The opportunity for you to serve your clients as a comprehensive business consultant, not just a number-cruncher.

First, Develop Expertise Within

In the mid-1980s, a prominent CPA firm on the East Coast had just purchased its first computers. What did the partners do to get started? Install Lotus 1-2-3 and build spreadsheets? Start creating client letters in WordPerfect? Choose between DacEasy and Peachtree?

No, they played "Jeopardy." They had to get to the point where they didn't run out of the room every time the computer beeped.

You don't have to start moving into the cloud on such a simple level, thanks to the level of sophistication and usability offered by innovative virtual solution providers. Randy Johnston, Executive Vice-President of and Shareholder at K2 Enterprises, an industry leader in providing educational and consulting services to business professionals, suggests that firms would be wise to fully implement Concur within their own practices first before introducing this new path to clients.

"CPAs should begin by using online travel and expense reporting themselves," Johnston, a tech visionary and consultant who has helped design today's prominent desktop accounting applications, says. Once they've done that, they can go to a few clients – first, those that employ a lot of travelers, and then subsets of businesses that have a fair bit of expense-related activities, like purchasing office supplies. Eventually, firms can bring all of their suitable clients into the fold.

Understanding the Transition's Why Eases Acceptance

Supporting one cloud-based application is a good start. Employees begin to understand the numerous benefits that virtual computing has over the standard desktop approach. Subsequent introductions of virtual applications are then even easier.

You should help these end users understand why the new system is being incorporated. Different organizations will have different answers. But the improved reporting accuracy and acceleration of the reimbursement process that Concur offers, for example, as well as better costing controls (funds flow into ledgers more easily) are compelling reasons to adopt these new online processes.

Objections from staff? You may face some. “Most are training issues,” Johnston says. Emphasize that documenting expenses as you go rather than dealing with spreadsheets and paper receipts once a month is the better path – and employees will likely get paid faster. Plus, using Concur in real time eliminates the pain of having to reconstruct a weeklong trip from a pile of receipts.

In the end, "…your firm will get the information that it should have been getting all along," Johnston says. If all goes well – if everyone is using Concur properly - travelers' expense reports will be pretty much done by the time they roll in the door.

Comprehensive Cloud-Based Accounting Solutions, and Another Kind of Cloud

You're probably familiar with the multi-function accounting solutions that are available in the cloud. QuickBooks Online, of course, is the web-based version of Intuit’s desktop offerings, though it lacks some advanced features. Xero offers core accounting functions in its base service, with numerous add-on options like payroll, inventory and time-tracking.

Intacct and NetSuite are as close to the future of cloud-based accounting as we have now in small business services. You can pick and choose from palettes of individual modules and customize nearly everything. Generous integration options provide the kind of mix-and-match flexibility that we’ll continue to see from other providers.

There's another way to ease your firm's clients into cloud-based accounting: private clouds. Multiple vendors – like Microsoft, Citrix and VMware - provide such a service. Rather than exposing your company’s data to all of the unknowns on the internet, you can employ this secure computing architecture to allow the freedom and interactivity that cloud computing offers, but store everything behind your own private firewall.

Marketing Your New Skills

Once you feel confident in your knowledge and your ability to implement cloud-based solutions, start making these options known to both current and potential customers.

  • Perfect your elevator pitch. Though you'll sometimes be able to explain these concepts in depth, you may only have a couple of minutes with some prospects.
  • Look around you: Are other firms in your area struggling with how to begin? Team up.
  • Distribute an occasional newsletter to your existing base that explains cloud-based solutions, or start a blog.
  • Use your website and social media connections to market the new tools.
  • Organize evening or weekend workshops for interested companies, or host webinars.
  • Emphasize the remote capabilities of what you’re supporting and tell your audience about the dramatic impact that mobility can have on their businesses (flexible work hours and venues, 24/7 access to data, the ability to stay in touch when on the road, etc.). Your clients will want to know how this can improve their workflow and their bottom line, so give them five ways that cloud-based accounting can make this happen.

A Potentially Lucrative Outcome

At this stage, the definition of “cloud-based accounting” is still evolving. Most small businesses are still using desktop software that offers connections to web-based services. Hosting services from organizations like Right Networks can accommodate those clients who want the QuickBooks experience, but remotely. A small percentage (Johnston estimates no more than 2 percent) has moved into totally virtual accounting, using services from companies like Intuit and NetSuite.

There are still a lot of disparate, non-connecting pieces, so you may need the ability to integrate them during these early years. Fortunately, those connections are far easier to build in the cloud than in desktop software, says Johnston, but this task will sometimes require special skills. So network with more knowledgeable peers, attend conferences and state CPA gatherings, take advantage of free trials of cloud solutions and stay abreast of news in accounting publications and from application providers.

These are exciting times for CPAs; they're rife with possibilities and opportunities. Getting your clients up and running no longer just involves deciding which version of QuickBooks to recommend. Adding cloud-based services as a new practice area will require ongoing learning and professional networking on your part, but the CPA technologist community offers myriad educational resources.

The payoff for acquiring these new abilities will come in the form of increased billings as you consult with clients to lay out the ever-changing options and establish their needs. Cloud-based accounting can open new avenues for growth and development, and will ultimately create new revenue streams, sharpen your technical skills and enhance your ability to support clients in numerous ways. Virtual accounting can help you become a true business advisor.  

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